Production issues drag down profits for castings group

Castings and engineering group, Chamberlin, has warned shareholders that production problems are likely to drag down profit expectations – despite revenues being in line with expectations.

In a trading update, the Walsall-based group said margins within its foundry businesses had been adversely affected by production issues.

“At the new machining facility technical difficulties have created cost inefficiencies and extended cycle times. The company is addressing these issues and is working very closely with the machine and tooling suppliers to rectify the situation,” it said.

“While management still expects group revenues for the year to be substantially ahead of the prior year, underlying profits are now expected to be in-line year with the prior year.”

Revenues for the first six months of the current financial year were said to be in line with management expectations, reflecting overall good levels of demand across the foundry and engineering businesses.

The two engineering operations, Exidor and Petrel, continue to trade in line with expectations, and demand for turbo charger bearing housings, a key growth driver for the group, continues to grow.

Results for the half year to September 30, 2017 are expected to be published towards the end of November, when a further update on current trading will be provided.